Late payment culture must be tackled by Small Business Commissioner - CIPS

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The UK government has launched tougher measures to tackle late payments to small businesses as part of its upcoming Prompt Payment & Cash Flow Review.

The review comes as a culture of late payments continues to hang over UK businesses. The below figures come from an analysis by the Chartered Institutes of Procurement & Supply (CIPS) of the data submitted as part of the Government’s Reporting on Payment Practices and Performance Regulation. These figures were accurate as of the 4th July 2023.

  • On average, 26% of payments were late in 2023 so far. This figure was at 31% in 2018, signifying only a slight improvement in payment practices in that time. 
  • In 2023, large businesses took an average of 36 days to pay, a figure which has stayed remarkably consistent over the last five years and has fallen by just one day since 2018.
  • Despite submitting to the database being a legal requirement for big businesses, the number of submissions to the database has fallen every year since 2019, with 15,087 submissions in 2019 but only 12,829 last year.

Nick Welby, CEO, Chartered Institute of Procurement and Supply (CIPS), said: “These are small steps in the right direction towards ending late payment in the UK, and we fully support broadening the powers of the Small Business Commissioner to investigate and hold late paying organisations to account.

“But, we will never stop bad organisations from treating their suppliers as a line of free credit until we change the culture around payments which stems from an outdated perception that squeezing suppliers is good business.

“Times have changed.  Supplier relationships built on openness, trust and respect support innovation and diversity, drive decarbonisation and build resilience to future shocks. It is time to realise that paying less and paying later, almost always comes at a cost.”

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